The funding, from Alibaba and its financial services arm Ant Financial, means Ele.me is now valued between USD5.5 billion and USD6 billion, the news wire reports. The investment will help Alibaba better compete with a similar service from internet rival Tencent (700.HK).

Here’s more on the deal, which hasn’t been confirmed yet:

While meal-delivery businesses around the world have struggled for profits, China’s two largest Internet companies see on-demand services as a way to promote their lucrative online payments services. Growth in domestic food and restaurant transactions also outstrips many other retail segments in the world’s second largest economy. Alibaba is already the biggest shareholder of Ele.me, which it uses to complement a separate service called Koubei that provides restaurant bookings and spa treatments.

Tencent also holds a minor stake in Ele.me after a joint investment by Alibaba and Ant Financial in 2016 diluted the former’s holding. If completed, the latest deal would be China’s second-biggest start-up fundraising round for the year. Earlier in 2017 ride-sharing app Didi Chuxing raised USD5.5 billion.

Alibaba’s shares have had a tremendous year-to-date, soaring over 40%.

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.